By Miki Shimogori TOKYO, May 7 (Reuters) - Japan's Softbank Corp (TOKYO:9984), an expanding software and publishing house, announced on Thursday that its group profits grew more slowly in the last business year, after years of dramatic expansion. Softbank, led by one of Japan's most charismatic entrepreneurs, Masayoshi Son, also unveiled steps to try to win back investor trust by absorbing and liquidating MAC, a controversial asset management firm owned by Son. It also said it would change company rules so it could buy back its own shares to make them more attractive. Softbank's group net profit totalled 10.3 billion yen ($78 million) in the year ended on March 31, up 13 percent from the previous year, in which it had posted a 57 percent profit rise. Group current profit fell 13 percent on stagnant business at home and an unexpectedly small profit at computer motherboard maker Kingston Technology in the face of a fall in global semiconductor chip prices. Current profit is pre-tax and includes losses or gains on investments. On a parent basis, the company's current profit grew 12.3 percent to 26.28 billion yen in 1997/98 after a jump of 78.9 percent the previous year. In addition to its core software business, Softbank is also a partner with Rupert Murdoch in a satellite television service in Japan and is a major Internet service provider. It has also aggressively acquired firms abroad. Son remained confident about the firm's financial state, which he said should be helped by last Wednesday's listing of U.S. PC magazine unit Ziff-Davis (NYSE:ZD) in New York, in which Softbank has a majority stake. Son said that Softbank, which has pursued an expansion-through-acquisition policy, had obtained fresh money of 152.4 billion yen from the listing, and that the company was mulling how to use the money, adding that the redemption of some corporate bonds would be one option. "The amount of Softbank's debts are declining," Son said, adding that the recent weakness of the yen was a windfall that had increased latent profit at the U.S. companies which Softbank has taken over in the past three years. The firm, saddled with hefty debt, had been dogged by rumours about its weak financial health. Investors have also been worried about its profitability and complicated management structure, particularly the functions of MAC. As of March 1997, Softbank had racked up a whopping 685 billion yen in debt through a rapid expansion drive which included the $2.1 billion purchase of Ziff-Davis. Son said the latest decision to merge MAC on December 1 would lead to "complete separation" of MAC from the group, because MAC would be liquidated after the planned merger. MAC took over the loss-making divisions of acquired firms such as the Ziff-Davis's Internet information company, ZD Net. MAC also manages currency risks to help protect Softbank from possible forex losses when it acquires foreign companies. The listing of Ziff-Davis has enabled the U.S. unit to repurchase most of its former operations now held by MAC, including ZD Net for $270 million in May, following a similar purchase of $100 million worth of former operations in October last year, Softbank said. The move will in turn help MAC repay its debts, it said. Softbank said it would also change company rules to enable it to buy back up to 10 million of its shares, or 60 billion yen worth, amounting to up to 9.7 percent of its outstanding shares. The planned share buy-back is subject to approval at a shareholders' meeting on June 19. tokyo.equities.newsroom@reuters.com))

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